VENTURA COMMODITIES PVT.LTD. BRIEF REPORT ON CASTORSEED AND CASTOR OIL CASTOR SEED INTRODUCTION Castor (Ricinus communis L.) is cultivated around the world because of the commercial importance of its oil. Castor seed is one of the commodities where India enjoys supremacy as far as production and export is concerned. India contributes 750,000 tons annually, and accounts for over 60% of the entire global production. Castor grows best under tropical conditions. It is extensively cultivated in a few states in India namely, Gujarat, Rajasthan and Andhra Pradesh which have suitable climatic conditions. India produces, on an average, around 800,000 tones of Castor seeds annually, accounting for about 75% of the world's production. Brazil and China constitute the balance global Castor seed production. In recent years however, Brazil and China have experienced stagnation in Castor crop. The demand for castor oil is more in the industrialized nation such as the US, European countries.the US is totally dependent upon imports to meet the industry and defense needs of castor oil. CASTOR USES More than castor seeds,it is castor oil that generates high in demand. Castor oil is also used in a wide range of cosmetics, toiletries, and transparent soaps. Castor is a versatile, renewable resource having vast and varied applications such as lubricating grease, surfactants, surface coatings, telecom, engineering plastics, pharma, rubber chemicals, nylons, etc. The primary use of Castor oil is as a basic ingredient in the production of nylon 11, jet engine lubricants, nylon 6-10, heavy duty automotive greases, coatings and inks, surfactants, polyurethanes, soaps, polishes, flypapers, paints, varnishes, lubricants, and many other chemical derivatives and medicinal, pharmaceutical and cosmetic derivatives. 1 Tuesday, September 27 th, 2005
INDIAN SCENARIO India is also the biggest exporter of castor oil. It corners about 70% of the global castor oil trade. Given the preference for castor oil, particularly from the industrial sector, it is constantly in demand, which is estimated at about 220,000 tons per annum. During 2003-04 India produced 0.67mn tons of castor seeds. CROPPING SEASON In India, Castor is a Khariff crop which is planted during July/August and harvesting commences around December/January. The seeds are then dried, de-podded, bagged and brought to the market yards for trading. The Indian variety of Castor has an oil content of about 48%. SOWING TIME Sowing of castor with onset of monsoon is found most beneficial in rained condition. However, sowing can be done up to first fortnight of August without reduction in yield under irrigated condition. CASTOR GROWING AREA & ITS PRODUCTION Castor grows under tropical conditions. It loves heat and humidity and does best in regions where both are ample. India, gifted with an ideal climatic condition, has recorded a produce of close to 850,000 tones of castor seed. Gujarat produces 86% of the total castor seeds in India followed by Andhra Pradesh and Rajasthan. Mehsana and Banaskantha are the largest castor producing districts in Gujarat. In Gujarat castor cultivation is comprising 6 districts of North Gujarat, viz., Mehsana, Banaskantha, Sabarkantha, Gandhinagar, Ahmedabad and Kutch. India is the world leader in castor seed and oil production and dominates the International castor oil trade India's castor production fluctuates between 6 to 9 lakh tons a year. In 2003-04, India's castor production was 8.04 lakh tons. Gujarat accounts for 86% of India's castor seed production followed by Andhra Pradesh and Rajasthan. Castor is mainly grown in Mehsana, Banaskantha and Saurashtra/Kutch regions of Gujarat and Nalgonda and Mahboobnagar districts of Andhra Pradesh. India's annually exports around 2.0-2.4 lakh tons of commercial castor oil, 50,000-60,000 tons of castor seed extractions and 15,000-20,000 tons of castor seed. Castor seed and oil are also exported to various countries, especially European Union, US and Japan. While 90 % of castor seed and oil in India is produced in Gujarat and Andhra Pradesh, the domestic consumption is dispersed all across the country. MAJOR TRADING CENTRES The major castor seed markets in Gujarat are Rajkot, Ahmedabad, Gondal, Gadwal, Bhabar, Disa, Kadi and in Andhra Pradesh - Jedcherla and Yemignoor. 2 Tuesday, September 27 th, 2005
INTERNATIONAL SCENARIO The world castor seed production fluctuates between 12 to18 lakh tons. India is major producer with 64 % share, followed by China and Brazil with 23 % and 7 % share respectively. Countries from tropical regions dominate castor market. MAJOR PRODUCING REGIONS Castor is grown especially in arid and semi arid region. Castor is originated in the tropical belt of both India and Africa. It is cultivated in 30 different countries on a commercial scale. India, China, Brazil, USSR, Thailand Ethiopia and Philippines are major castor growing regions. They account for about 88% of the world's production. Brazil, China and India have been the key producing countries meeting global requirements. WORLD CASTOR PRODUCTION PRODUCTION SCENARIO IN INDIA Crop Area Sown (Lakh Hectares) Production (Million Tonnes) Sept Sept Sept 2003-2004- 2005-2003 2004 2005 2004 2005 2006(E) Castor 7.29 8.27 9.46 0.80 0.83 0.95 MARKET INFLUENCING FACTORS Variations in castor seed domestic acreage based on yield and price realization, Crop development based on monsoon progress in key growing regions Chinese and Brazilian crop size Comparative price with other vegetable oils in the domestic market, 3 Tuesday, September 27 th, 2005
Upcountry demand of castor oil from the major cities, Export demand of castor oil from US, Europe and Japan The castor seed price tends to firm up during the planting period and eases down during the harvesting period. Prices tend to show inter-seasonal variation of almost Rs 200 - Rs 350 per quintal. Castor seed growers and crushers hoard the commodity before selling in expectation of better prices. Castor oil too can be kept in containers without spoilage for long period. CASTOR OIL INDIAN SCENARIO India is the world leader in castor seed and oil production and dominates the international castor oil trade. The Indian variety of castor has 48 % oil content of which 42% can be extracted, while the cake retains the rest. India's castor oil production fluctuates between 2.5-3.5 lakh tons a year. In 2003-04, India's castor oil production was 2.8 lakh tons. The annual domestic consumption of castor oil in India is only about 80,000-1,00,000 tons. India's annually exports around 2.0-2.4 lakh tons of commercial castor oil. From India castor oil is exported in two forms - First Special Grade and Castor Oil Commercial through mainly Kandla port. There is a large scope for improving India's earning from castor by converting the castor oil to various derivatives. A considerable quantity of the castor oil is also used in adulteration of edible oils like groundnut oil due to price differential. 4 Tuesday, September 27 th, 2005
WORLD SCENARIO India is the leading producer of castor oil in the world, followed by China and Brazil with 0.8 and 0.4 lakh tons respectively. The present annual world trade in castor oil is estimated at about 2.0-2.50 lakh tons. The major importers of castor oil in the world market are European Union, US and Japan. The world demand for castor oil is estimated to be growing at the rate of about 3 to 5 % per annum. Both Brazil and China have experienced a steady increase in their domestic castor oil consumption in the recent years and thus utilize almost their entire production. India consumes only a quarter of its castor oil production and exports the rest. CASTOR OIL PRICES Castor seed availability/arrival in the market place and its numerous usage makes it a highly volatile commodity. Also the large number of down-stream products make consumption demand of this oil price inelastic.in the international market, castor oil is one of the most expensive vegetable oils. Despite India s dominant position in the global castor market, in the exports market the Indian castor produce doesn t drive the prices. FUTURES CONTRACT SPECIFICATION OF CASTOR SEED ON NCDEX Name of commodity Ticker symbol Trading system Price Unit Trading Quantity Tick size Delivery centre Trading hours Castor seed CASTORDSA NCDEX Trading System 20 Kgs 10MT Re. 0.10 (10 paisa) Disa As per directions of the Forward Markets Commission from time to time 5 Tuesday, September 27 th, 2005
currently: Mondays through Fridays Trading Hours - 10:00 am to 5:00 pm Saturdays Trading Hours - 10:00 am to 2:00 pm The Exchange may change the above timing with due notice Gain/Loss per Re 1 Change 500 FUTURES CONTRACT SPECIFICATION OF CASTOR OIL ON NCDEX Name of commodity Trading system Price Unit Trading Quantity Tick size Delivery centre Castor oil NCDEX Trading System 10 Kgs 1MT Re. 0.10 (10 paisa) Kandla As per directions of the Forward Markets Commission from time to time, currently: Mondays through Fridays Trading hours Trading Hours - 10:00 am to 5:00 pm Saturdays Gain/Loss per Re 1 Change 100 Trading Hours - 10:00 am to 2:00 pm The Exchange may change the above timing with due notice 6 Tuesday, September 27 th, 2005